So, what now? You were awarded the marital home in the divorce but you’re not a borrower on the existing mortgage. How do you work with the Mortgage Holder going forward?
If you were awarded the marital home during divorce and will be refinancing the current mortgage into your name or if you will be keeping the existing mortgage as is - if you are not a current mortgagee (borrower) on the existing loan there are a couple of things to keep in mind.
When refinancing a mortgage into your name and you are not a current mortgagee, is not typically a problem. Whether your name is currently on the title to the home and if so for how long or your name is currently not on the title to the home may impact the type of mortgage you will be able to obtain. It is highly recommended that you speak with a divorce mortgage planning professional to determine your eligibility.
If the plan is to retain the existing mortgage as-is and you are not currently a mortgagee on the mortgage there...
As a divorce mortgage planner, a CDLP™ is often brought in to work with a client who is going through a divorce. Typically, one of the divorcing spouses would like to retain the marital home while the other may wish to purchase a new home. Here is a list of 5 things you should know about getting a mortgage either during or after the divorce. Divorce mortgage planning is very different than traditional mortgage lending and you will be better served working with a Certified Divorce Lending Professional (CDLP™) who has the required background knowledge of divorce.
#1. Timing of Filing Divorce Petition
The timing of filing a divorce petition with the court has a direct impact on mortgage financing. When a petition for divorce is filed, most mortgage lenders will require a finalized divorce settlement agreement ordered by the court in order to complete and close a new mortgage application and/or loan.
Why? Because many things can change during the course of...
When divorcing couples decide to call it quits one of the first things they think about is ‘what to do with the marital home?’. Should we sell it? Will one of us keep it? What’s it worth?
Obviously, assessing the value of the marital home and other real estate owned in a divorce is a big deal in the settlement process. The question is how to best determine the value.
How do we determine the value of the real property? Should we have an appraisal done or should we ask a real estate professional? It actually depends on what you might do with the property so understanding the difference between an appraisal and a Comparative Market Analysis (CMA) is important.
The two most common methods for assessing the value of real estate are obtaining an appraisal from a licensed appraiser or having a real estate professional provide a CMA— but what’s the difference between the two? To start, both methods are an opinion of value and no two will ever give you the same...
Have you ever given thought to the value of perspective that each member of the professional divorce team brings to the table?
Every divorce is different. Each having it's own set of assets, emotions and narrative. The strength and knowledge of each professional involved can have a major impact on the outcome.
Perspective is a way of regarding situations, facts, etc., and judging their relative importance. Perspective is the capacity to view or think about a situation or problem in a wise and reasonable way.
Certified Divorce Lending Professionals (CDLP™) have a completely different perspective when looking at a divorce settlement agreement and participating in the actual settlement or mediation process. CDLP™s don't just look at the divorce settlement agreement and how it applies to the borrowing spouse's mortgage application. They have a much wider viewpoint and understanding of the entire process - a deeper and stronger perspective of the overall impact divorce...
During a marriage, the financial identity of both spouses may become comingled due to joint bank accounts, joint credit cards, co-mortgagees, and more. Protecting yourself or your clients from financial identity theft during and after the divorce is final should be a top priority.
According to the Federal Trade Commission, identity theft falls into six major categories:
Real Estate, whether it is the marital home or investment property, is one of the greatest assets owned by married couples. Typically in a divorce situation, the property is sold or retained by one party, and ownership is transferred solely into their name.
When real estate property owned is sold, each party may be subject to capital gains tax. Depending on the value of the property at the time of the sale vs. the initial acquisition cost plus improvements, it may be wise to speak with a financial planner to weigh all options such as a 1031 exchange. (IRC Section 1031 – like-kind exchange)
Per IRS rules, a 1031 like-kind exchange provides an exception that allows you to postpone paying capital gains taxes if you reinvest the proceeds from the sale of an investment property (the “relinquished property”) into a similar property (the “replacement property”) as part of a qualifying like-kind exchange. The seller has 45 days to identify a...